In the past decade or so, almost all of the largest new home builders, and many mid-sized and small companies, have turned to subcontractors to assemble every part of the homes they build. One reason is that as suitable land becomes more scarce and regulations more complex, many builders find that it is more profitable to stick with what they're good at: development. That includes everything from land acquisition and permitting to marketing, sales, and community relations. By subcontracting the actual construction for a fixed price, they reduce their risk and get their money out of the land faster.

But another reason is the fact that during the same time period, the long-standing shortage of skilled labor has increasingly been filled by immigrants, primarily from Mexico and South America, but also Eastern Europe and Asia. Rather than take on the burden of hiring and supporting large numbers of non-English speakers (and sorting through problems associated with work visas, illegal immigration, and the like), home builders have found it easier to subcontract to companies employing immigrant labor.

Challenges for Remodelers I believe a similar trend is about to take place in remodeling. For one thing, some of the same business reasons are starting to appear. The more successful and sophisticated remodelers become, the more they develop expertise in preconstruction services like design development and estimating, up to and including product selection. To be able to focus on what they're good at, they may increasingly turn to subcontractors for the actual construction.

And like new home builders, remodelers also continue to experience a labor shortage and have also started to use non-English speaking immigrant labor to fill the gap. But the circumstances of a remodel are different from those of a new construction site. The most obvious difference is that the homeowner is usually living in the house and wants daily updates on progress. This means that at least one individual in the production crew must be able to speak English.

One solution is to again follow the lead of home builders. They have solved the language problem by training English-speaking or bilingual project managers to handle a high number of projects in a subdivision, making sure they are on the spot when prospective buyers visit the sites. Remodelers could adapt, for example, by training lead carpenters or production managers to speak Spanish and run as many as five jobs in a close area. This would enable them to supervise Hispanic crews while being available on site to answer homeowner questions.

Another Answer Some companies won't be able to coordinate their work within a tight enough area to make this solution work. Others may not be able to find enough lead carpenters who can supervise non-English speaking crews. For these companies, another possible solution may emerge. I think we may see small remodeling contractors setting up their own Hispanic group and offering construction services to larger contractors. This would provide the same benefits to larger remodelers as it does to large home builders: a fixed price for construction and a plentiful supply of labor without the red tape of having to hire and support immigrant workers on payroll.

My point is that remodeling companies that have been using their own crews to do all of the installation are going to have to learn how to use immigrant subcontractors to handle each segment of the construction process. It is not clear now just how fast this change is going to take place, but it is almost sure to happen in the next two to five years. Immigrant workers are performing the installation of most products or services in almost every business where the use of hands and muscle is required. The remodeling industry will soon need to use this approach in order to succeed. — Walt Stoeppelwerth is a publisher of management and estimating information for professional remodelers. 800.638.8292;;